Page 6 - AfrOil Week 05 2022

AfrOil COMMENTARY AfrOil

Dangote set for 2022

launch as Nigeria waits

The refinery, which has been in the planning stage for almost a decade, has the

potential to reshape Nigeria’s economic landscape when it launches later this year

A representative of Dangote Refinery has said The country is currently a net importer of fuel,
that the exact start date of the new oil-process- even though it is Africa’s largest oil producer.
WHAT: ing plant will be dependent on the outcome of a
The Dangote plant will testing programme that is due to wrap up late in Refining uptick
launch with an initial the third quarter of 2022. NNPC took its Port Harcourt, Kaduna and
capacity of 540,000 The announcement suggests that the facility Warri refineries out of service in 2019 for long
bpd, instantly becoming may reach full capacity ahead of February 2023’s overdue repairs, having failed to carry out turn-
Africa’s largest refinery. elections, and enabling the outgoing adminis- around maintenance (TAM) work in as much as
tration of Muhammadu Buhari to depart on a four decades. The country’s state refining capac-
WHY: high note despite likely leaving his successor to ity fell to zero as a result.
While state-owned refin- implement subsidy removal, albeit with some of That maintenance work kicked off belatedly
ing capacity has fallen to the most important groundwork already laid. in mid-2021, following major awards to Italy’s
zero, modular refineries
have provided a welcome Maire Tecnimont, Saipem and the latter’s sub-
boost for remote areas. Launch date sidiary Saipem Contracting, and it is unlikely to
“Barring any hitches during this period of the bear fruit until next year.
WHAT NEXT: test run of the units, the refinery will start refin- However, according to a research note by
The start-up of operations ing crude into [petroleum] products by the consultancy IGM Energy, “the Nigerian down-
at the Dangote refinery fourth quarter of this year,” the official, who was stream sector has received a meaningful boost
is expected to ease the not named, said on January 24. over the past 14 months from the successful
Nigerian government’s He was speaking to S&P Global Platts not implementation of several modular refinery
strained finances. long after Aliko Dangote, the president of Dan- projects integrated with oilfield developments”.
gote Industries, said he expected his holding’s These facilities have a current capacity of
new refinery to begin operating before the 22,000 bpd, it said, and account for Nigeria’s full
end of September 2022 at an initial capacity of active refining slate.
540,000 barrels per day (bpd). When it launches, though, the Dangote facil-
At a press briefing in Lagos on January 22, ity will “steal the limelight”, turning Nigeria from
Dangote told reporters that nearly all of the an importer of refined products to an export
work on the oil-processing plant had already overnight. The success of modular refining is
been finished. “Mechanical work on the refin- likely to continue providing vital fuel supplies
ery is complete, and hopefully before the end of to remote areas and easing reliance on infra-
third quarter we should be in the market ... Full structure that is susceptible to vandalism. IGM
production can start, maybe, by the end of the Energy sees a further three modular refineries
year or [the] beginning of 2023,” he was quoted being added in 2022, namely those being built
as saying by Platts. by Duport Midstream in Edo State (2,500 bpd
The pre-commissioning of the plant’s pro- in March), ans Azikel Petroleum Ltd (12,000
duction units and export facilities began last bpd) and Atlantic International Refineries and
month, following the start-up of the fertiliser Petrochemical (2,000 bpd), both in Bayelsa state.
plant built together with the refinery. The plant While they will be eclipsed by the 540,000
has been under construction since 2013 and was bpd throughput of Dangote – and 650,000 bpd
originally due to come online several years ago. soon after – these will take Nigeria’s modular
Nigeria’s government took a 20% equity stake refining capacity beyond 38,000 bpd, providing
in the plant through the national oil company in a much-needed “win” for domestic enterprise
August 2021. Under this deal, Nigerian National and delivering a proven business model for
Petroleum Corp. (NNPC) is slated to provide future remote field development.
the Dangote refinery with 300,000 bpd of crude
oil, or more than 46% of the feedstock it needs to Wait almost over
operate at its full capacity of 650,000 bpd. The Nigerian government has great hopes for
When finished, the Dangote refinery will be the Dangote refinery, as it hopes the facility will
capable of turning out enough petroleum prod- help eliminate costly fuel subsidies and the need
ucts to cover all of Nigeria’s domestic demand. to import refined petroleum products.

P6 www. NEWSBASE .com Week 05 02•February•2022